According to international studies, a quarter of investors prefer to invest in real estate. This is a market segment where there are no high risks and constant income is expected. Using the real estate directory, we will consider how to invest in real estate and what investment methods are guaranteed to bring profit.

How profitable is this!!!

Real estate is in stable demand and the price per square meter is constantly growing. This makes it the most attractive for investment. According to experts, investments in this sector of the economy are less risky compared to trading on stock exchanges, investing in startups, or opening a business.

Analysts have identified a pattern: the larger the city, the more profitable it is to invest in real estate. This is explained by the demand for living space and slight fluctuations in prices for objects. Therefore, it is recommended to invest savings in large populated areas with a high level of business activity.

Pros, cons and risks!!!

To increase your capital, you should give preference to long-term investment instruments that will not only provide stable profits, but will also be protected from the influence of external factors, including inflation. Use the Radaris service to find old friends and relatives with whom you have long lost contact. 

A stable investment option is the real estate industry.

Advantages of investing in real estate:

• Obtaining long-term profit when renting out an object.
• Availability of investments, relative ease of processing transactions.
• Liquidity of real estate, ensuring the preservation and increase of invested funds.
• Large selection of suitable investment options.

However, there are also disadvantages:

• The demand for real estate is proportional to the economic situation in the country. During a crisis, profits will decrease.
• High prices for real estate.
• Instability of demand for housing in small towns.

Maintenance costs, utilities, repairs, tax deductions.

Force majeure situations may also arise. The price category of real estate will drop sharply due to unforeseen circumstances. These include:

• rapid environmental deterioration,
• the emergence of nearby pockets of social instability,
• construction of industrial facilities and highways nearby.

What kind of real estate is profitable to invest in!!!

The benefits of investing directly depend on the chosen method. It is necessary to analyze the market and identify promising areas for investment.

Residential Properties!!!

Buying residential real estate is a low-risk option for private investors. You can earn money in several ways:

• purchasing real estate for resale at an inflated price;
• purchase for rental (long-term or short-term).

Commercial real estate!!!

What criteria affect the investment attractiveness of an object:

1. Location. Apartments in quiet areas with favorable environmental conditions are in demand. Expensive premises are located closer to the city center; more economical offers are presented on the outskirts.

2. Infrastructure. There should be schools, kindergartens, hospitals, public transport stops, and retail facilities nearby. Otherwise, the attractiveness of the property decreases, which negatively affects its value.

3. Condition of the apartment. Premises with high-quality renovation are in great demand. This will increase the value of the apartment upon resale or rental by 15-25%.

4. Social and crime situation. If the property is located in a disadvantaged area, prices naturally decrease.

Suitable for experienced investors. Commercial real estate includes projects for supermarkets, warehouses and production workshops, shopping areas and office space. They are in great demand among businessmen who are willing to pay rent.

The key advantage of commercial projects is receiving passive income. The investor's profit does not depend on the time spent. And the only negative is the high price of the objects. To invest in this direction you will need a large amount.

Land!!!

This option is suitable for novice investors and those with limited funds.

Advantages of investing in land:

• minimal risk of encountering scammers;
• small tax;
• ease of completing the transaction (you can do without realtors);
• no additional costs (utilities and maintenance).

When purchasing land plots, the purpose of use should be taken into account. According to the law, it is impossible to organize a business on lands intended for individual housing construction.

To make a profit, it is recommended to invest in land for private construction. Long-term investments are intended for use in industrial and agricultural purposes.

Country estate!!!

This is one of the promising areas of investment. You can make a profit in three ways:

• purchasing real estate for resale at an inflated price;
• purchase of land for individual housing construction, subsequent construction and sale;
• rental.

When deciding to invest in this segment, analyze the location, availability of infrastructure and communications.

Real estate construction!!!

This method is suitable for experienced investors with large savings. Building a property from scratch will require a lot of time and money. You can make a profit if you assure buyers of the reliability and quality of the development. Otherwise, the project risks not paying off.

Investments in parking spaces!!!

Every year, sanctions for parking in inappropriate places are becoming stricter. Therefore, the organization of parking zones is becoming a promising area for investors. The only negative is that the method is available only in cities with dense buildings.

Despite the fact that parking areas are in demand, the project has a considerable amount of risk, and it is impossible to predict the income.

Participation in real estate funds!!!

A mutual fund is a real estate trust. Investing in mutual funds is suitable for investors with small capital who do not want to engage in property management.

The fund works according to the following scheme:

1. Investors invest their own savings in the development of the company.

2. The organization appoints experienced professionals to management positions.

3. Using the funds received, the fund carries out real estate transactions.

4. Profit is divided among investors in proportion to investments (before this, an investment trust commission is paid).

The risk is that you may come across fly-by-night companies. You should study information about the fund, analyze the activities of the organization, and communicate with people involved in property management.

Investments in foreign real estate!!!

Foreign real estate is purchased for rental or subsequent resale. It is important to study the legislation of the state where the purchase is planned. In some countries, foreigners have favorable conditions for purchasing square meters, while in others the requirements are stricter.

The ideal option is to buy real estate in popular tourist areas and resort towns. Such real estate pays dividends and rarely loses value.

Ways to invest in real estate!!!

Let's look at popular approaches to how to properly invest in real estate to achieve your financial goals.

Receiving income from rental!!!

The most popular investment option. Renting brings a stable profit over a long period of time with minimal risks and financial losses. Income can be obtained from short- and long-term rentals.

For a long time!!!

An investor does not need to make much effort to find clients. To receive income, all you have to do is enter into an agreement with the tenant and receive the agreed amount monthly.

Dividends are guaranteed when renting out commercial real estate. In the case of housing, everything is more complicated - long-term rent requires maintaining the normal condition of the premises and a low level of profit.

Daily!!!

The most profitable option. Depending on the location of the apartment, you can get a stable income per day. The emphasis should be on business travelers and tourists.

Daily rent also has disadvantages:

• daily cleaning costs;
• search for tenants;
• the likelihood of damage to furniture and other property.

Receiving income from resale!!!

This method involves the purchase of an inexpensive property and its subsequent resale at 15-30% more expensive. Suitable for investors who are ready to invest additionally. If you buy an object in poor condition and make repairs, you can earn on resale a third more than the original cost of the apartment, including repair costs.

How to start investing in real estate!!!

To understand how to invest in real estate, focus on the three basic rules of a successful investor: prudence, consistency, security.

Determine the level of financial capabilities!!!

The primary task of an investor is to determine the exact amount he is willing to invest in real estate. Based on it, you need to decide what type of real estate is best to invest in in order to receive dividends.

Explore the offers!!!

The size of the future transaction and the return on investment depend on market analysis. This will allow you to create profitable offers.

Select object!!!

The object should be selected based on liquidity. To do this, you need to decide not only on the type and purpose of the property, but also pay attention to the location, infrastructure, attractiveness, etc.

Buy an object!!!

To invest money in real estate, you need to purchase it. Beginning investors should enlist the help of a lawyer or realtor. They will be able to guarantee the security of the transaction.

Make a profit!!!

To generate income, real estate must be resold or rented out.

When investing in an apartment during the construction stage, you will have to wait several years for income. However, you need to be prepared for additional costs. 

Renting is a long-term investment. Depending on the object, cost recovery takes 5-10 years. The owner will not face additional costs; this option is less risky than others.

How to increase your return on investment!!!

The investor's goal is to maximize profits. To achieve this, you can use the following methods.

Dividing a large apartment into a studio!!!

It is more profitable for a property owner to rent out housing to several tenants. If you own an apartment with a large area, you can arrange two functional studios in it and accommodate two people. You will be able to earn many times more.

If the owner owns a large property (from 100 sq.m.), you can organize your own business (for example, a hostel).

Redevelopment!!!

Redevelopment makes the property more functional without changing the total area. Statistics show that it is possible to increase the cost of an apartment by 15-30%.

Before remodeling a residential premises, it is necessary to study the legal requirements. It is prohibited to demolish load-bearing structures or expand the kitchen at the expense of residential premises by more than 25%.

The redevelopment must be approved by the district administration and the architectural department of the BTI. If this is not done, the property owner will be fined. It will become more difficult to sell the property, the price will fall, and the costs will not be recouped.

Expansion of premises due to completion!!!

The method is suitable for private houses, cottages, and partially the first floors of apartment buildings. When renovating suburban real estate, it is allowed to add additional floors, convert attic spaces into attics, and add a balcony or veranda.

It is possible to expand the living space on the first floors of multi-storey buildings by adding a balcony and only after obtaining permission from the BTI and municipal authorities.

Transfer of premises from residential to non-residential and back!!!

This method is advisable to use if you first study the demand for real estate in a particular area and the parameters of living space. If the apartment is located on the first floor of a multi-storey building, it can be used for commercial purposes. The level of income will increase if the premises are located in an area with high business activity, walkable areas.

Making a profit from repurposing real estate is typical for large cities. In small towns, the possibility of increasing profits is minimal.

High-quality repair!!!

One of the factors that increases the cost of an apartment is high-quality and expensive repairs. Many tenants are willing to pay more for exclusive renovations using expensive materials.

According to experts, depending on the quality of repairs, the cost of an apartment may increase by 15-20%. If all repair work is carried out by the owner himself without hired workers, the profit will be higher.

How to invest in real estate with low capital!!!

If an investor has a small amount, he can use several strategies:

1. Buying housing in an unfinished building. If you purchase real estate at the foundation pit stage, its cost will be 25-30% less. After the project is completed, the price may increase several times.

2. Buying an apartment without renovation. If you buy a property in poor condition and make high-quality repairs to it, the price will increase by 15-30%.

3. Purchase of unfinished objects. Many properties are frozen due to lack of funds. You can purchase them at a low price, complete all the work yourself and resell them.

4. Acquisition of confiscated property, bankrupt property, collateral. If the property is pledged by a bank and belongs to a bankrupt, it is put up for public auction. Such housing is sold at cadastral value. Therefore, you can find options that are 15-25% cheaper than market prices.

Having a small starting capital, an investor must carefully evaluate investment methods and their capabilities.

Conclusion!!!

Investing in real estate is a popular way to ensure maximum profit and preserve your initial capital. Like any other investment format, real estate has its advantages and disadvantages. When making an investment decision, an investor must analyze the market and determine the pros and cons of the transaction.